VLCC acquires Singaporean beauty and wellness co, deal pegged at over Rs 100 cr

Home-grown beauty and wellness chain VLCC, on Monday, said it has acquired 80% stake in Singapore-based beauty and wellness company Global Vantage Innovative Group (GVig) in an attempt to beef up its operations overseas, especially in the South-east Asian region.

 

While VLCC did not reveal the deal size, it is estimated to be more than Rs 100 crore. VLCC is likely to take over the remaining 20% equity over the next one year. The deal was funded through a mix of internal accruals and debt.

 

It is the second overseas acquisition by VLCC after Malaysia-based Wyann International, in which it had bought a majority stake in November last year.

 

“Besides entry into 10 new markets — Singapore, Malaysia, Vietnam, China, Hong Kong, Taiwan, Indonesia, Philippines, Cambodia and Korea, the acquisition has strengthened our portfolio with high-end luxury products,” said Mukesh Luthra, Chairman, VLCC Group. The company may announce one or more acquisitions in India and abroad over the next few months.

 

At present, VLCC has operations in the Middle East, Malaysia and neighbouring countries of Sri Lanka, Nepal and Bangladesh.

 

GVig is a leading provider of beauty and wellness solutions in South-East Asia through its three subsidiaries BelleWave Cosmetics, Celblos Dermal Research Centre, and Enavose Life Science Research.
 

The latest acquisition is expected to add about $30 million in revenue to VLCC this fiscal year, and would grow up to $50 million (Rs 183 crore) by end of next fiscal year, he added. The company hopes to cross Rs 1,500 crore by fiscal year 2015, from Rs 1,000 crore in fiscal year 2010.

 

Luthra said that following the GVig acquisition, VLCC gains access to the company’s research and development (R&D) laboratory and manufacturing facility in Singapore that would enable the Indian company to come up with high-end wellness products and solutions at a faster pace. At present, the VLCC Group has two factories in India located at Haridwar and Dehradun with a third plant about to be commissioned in Bangladesh.

 

VLCC plans to sell the high-end products of the newly acquired company in India and push its existing products in the new markets through the distribution channel of the Singaporean firm. 

 

“As we will be producing most of the products in India using their technology, we will be able to sell Bellewave products cheaper by about 30-40% as compared to the imported ones,” added Luthra.

 

VLCC, which is 15% owned by Everstone Capital, also has plans to go for a public listing over the next 18-24 months. CLSA, which had a 13.65% stake in VLCC, made an exit through management buyout in 2010.

 

The wellness industry in India is estimated to touch Rs 100,000 crore (Rs 1 trillion) by 2015, with a compounded annual growth rate of 15-17%, from about Rs 70,000 crore in 2012, according to a recent study by global consulting firm PricewaterhouseCoopers (PwC).